GOP Celebrates Reagan's Birthday With Lies About His Legacy

February 09, 2011 4:18 pm ET

To celebrate President Ronald Reagan's 100th birthday this month, Republicans have fanned out to acclaim his legacy, in the process spreading ample misinformation about the real economic circumstances surrounding his presidency and the real effects of his policies. The Senate alone devoted two hours of time to allowing members to discuss Reagan's legacy and impact, with many senators baldly inflating Reagan's accomplishments. While Reagan's legacy has turned him into a cult figure particularly revered by the Tea Party, in truth the effects of many of his policies are in direct opposition to Tea Party and conservative values. Using some revisionist history, conservatives turn even some of Reagan's shortcomings as a Republican icon — increasing the deficit, raising taxes, and growing government — into triumphs.

CLAIM: Reagan Lowered Taxes, Cut Federal Spending, and Limited Government

Rep. Ted Poe (R-TX): "Reaganomics was hailed ingenious by the supply-side, pro-growth economists and harshly criticized as 'voodoo' by the big government crowd." [Poe Op-ed via Newsmax, 2/4/11]

Sen. Jeff Sessions (R-AL): "He lowered taxes dramatically, including a reduction in the top rate from nearly 70 percent, and he reined in a runaway bureaucracy that had trapped innovation and productivity in a labyrinth of regulation and redtape. His faith in the free market was not misplaced. It rewarded us. He created 20 million new jobs, grew our gross national product by 26 percent, and began the longest peacetime boom in our history. Conditions improved for Americans in every walk of life. The net worth of families earning between $20,000 and $50,000 rose by 27 percent. Reagan's stunning success debunked every myth of those who believe a bigger government is more compassionate and can do more for more people." [Senate floor speech, 2/3/11]

Mitt Romney: "Here at home, Reagan saw a federal government that had become, like a diseased heart, enlarged and sclerotic. Paving a path trod today by the Tea Party, he sharply cut taxes to restore economic growth. He took painful measures to rein in double-digit inflation. He fought to cut federal spending. He sought to restore our Founding Fathers' vision of American greatness and limited government." [Romney Op-ed via USA Today, 1/24/11]

Rep. Reid Ribble (R-WI): "During his two terms in office, President Reagan restored our nation's economy from the grips of collapse ... and achieved freedom and prosperity for all." [Ribble statement via Oneida County Republican Party, 2/5/11]

Rep. Tom McClintock (R-CA): "In this crisis he said, 'government is not the solution to our problems, government is the problem.' He said 'the Soviet Union is indeed an evil empire,' and it was time, he said, that America 'stop apologizing its interests and started asserting them.' At the time, the American left people on the left excoriated Reagan, they warned his policies would lead to starvation and the world conflagration ... he reduced the tax and regulatory burdens that were crushing America's economy, he reduced government spending as a percentage of GDP, he restored America's military strength, reasserted American interests around the world, stopped apologizing for America's greatness, and started celebrating it." [House floor speech, 2/7/11]

FACT: Reagan Created "The Biggest Tax Increase Ever Enacted During Peacetime"

Reagan Signed A Large Tax Cut Immediately After Taking Office, But Ran Into A "Burgeoning" Deficit. According to CNN:

Soon after taking office in 1981, Reagan signed into law one of the largest tax cuts in the postwar period. [...] In 1986, Reagan lowered individual income tax rates again, this time in landmark tax reform legislation.

As a result of the 1981 and 1986 bills, the top income tax rate was slashed from 70% to 28%.

So, despite his public opposition to higher taxes, Reagan ended up signing off on several measures intended to raise more revenue. 

Despite the aggressive tax cutting, Reagan couldn't ignore the budget deficit, which was burgeoning.

After Reagan's first year in office, the annual deficit was 2.6% of gross domestic product. But it hit a high of 6% in 1983, stayed in the 5% range for the next three years, and fell to 3.1% by 1988. (By comparison, this year it's projected to be 9% but is expected to drop considerably thereafter.) [CNN, 9/12/10, parentheses original]

To Combat Deficits, Reagan Passed "Biggest Tax Increase Ever Enacted During Peacetime." According to CNN:

"Reagan was certainly a tax cutter legislatively, emotionally and ideologically. But for a variety of political reasons, it was hard for him to ignore the cost of his tax cuts," said tax historian Joseph Thorndike.

Two bills passed in 1982 and 1984 together "constituted the biggest tax increase ever enacted during peacetime," Thorndike said.

The bills didn't raise more revenue by hiking individual income tax rates though. Instead they did it largely through making it tougher to evade taxes, and through "base broadening" -- that is, reducing various federal tax breaks and closing tax loopholes.

For instance, more asset sales became taxable and tax-advantaged contributions and benefits under pension plans were further limited. [CNN, 9/12/10]

Reagan Increased Business Taxes In 1982, Payroll Taxes In 1983, And Energy Taxes In 1984. Economist Robert Shapiro wrote in Forbes:

Everyone remembers Reagan's 1981 tax cuts. His admirers are less likely to tout the tax hikes he accepted as the 1981 recession and his own tax cuts began to unravel his long-term fiscal picture--a large tax increase on business in 1982, higher payroll taxes enacted in 1983 and higher energy taxes in 1984. A decade later, when a serious recession and higher spending began to upend the fiscal outlook again, the first President Bush similarly raised taxes on higher-income people in 1991; Bill Clinton doubled down and raised them again in 1993. [Forbes, 2/3/10; emphasis added]

After Cutting Taxes In 1981, President Reagan RAISED Taxes 11 Times. According to Bruce Bartlett, an official in the Reagan administration:

It may come as a surprise to some people that once upon a time in the not-too-distant past Republicans actually cared enough about budget deficits that they thought raising taxes was necessary to bring them down. Today, Republicans believe that deficits are nothing more than something to ignore when they are in power and to bludgeon Democrats with when they are out of power.

Legislated Tax Changes by Ronald Reagan as of 1988

Tax Cuts

Billions of Dollars

Economic Recovery Tax Act of 1981

-264.4

Interest and Dividends Tax Compliance Act of 1983

-1.8

Federal Employees' Retirement System Act of 1986

-0.2

Tax Reform Act of 1986

-8.9

Total cumulative tax cuts

-275.3

Tax Increases

Billions of Dollars

Tax Equity and Fiscal Responsibility Act of 1982

+57.3

Highway Revenue Act of 1982

+4.9

Social Security Amendments of 1983

+24.6

Railroad Retirement Revenue Act of 1983

+1.2

Deficit Reduction Act of 1984

+25.4

Consolidated Omnibus Budget Reconciliation Act of 1985

+2.9

Omnibus Budget Reconciliation Act of 1985

+2.4

Superfund Amendments and Reauthorization Act of 1986

+0.6

Continuing Resolution for 1987

+2.8

Omnibus Budget Reconciliation Act of 1987

+8.6

Continuing Resolution for 1988

+2.0

Total cumulative tax increases

+132.7

 Source: Office of Management and Budget, Budget of the United States Government, Fiscal Year 1990(Washington: U.S. Government Printing Office, 1989), p. 4-4.

[CapitalGainsAndGames.com, 4/6/10]

Reagan Signed Tax-Hiking Social Security Reform Legislation That Canceled Out Much Of His Original Tax Cut. According to CNN:

There were other notable tax increases under Reagan.

In 1983, for example, he signed off on Social Security reform legislation that, among other things, accelerated an increase in the payroll tax rate, required that higher-income beneficiaries pay income tax on part of their benefits, and required the self-employed to pay the full payroll tax rate, rather than just the portion normally paid by employees.

The tax reform of 1986, meanwhile, wasn't designed to increase federal tax revenue. But that didn't mean that no one's taxes went up. Because the reform bill eliminated or reduced many tax breaks and shelters, high-income tax filers who previously paid little ended up with bigger tax bills. [...]

All told, the tax increases Reagan approved ended up canceling out much of the reduction in tax revenue that resulted from his 1981 legislation. [CNN, 9/12/10, emphasis added]

FACT: Reagan "Didn't Really Reduce The Size Of Government" — He Increased Federal Spending

Contrary To Reagan's Promises, He Grew The Budget And Increased the Federal Payroll. From Washington Monthly:

Though his budgets requested some cuts in some areas of discretionary spending, Reagan rapidly retreated and never seriously pushed them. As Lou Cannon, the Washington Post reporter who covered Reagan's political career for 25 years, put it in his masterful biography, President Reagan: The Role of a Lifetime, "For all the fervor they created, the first-term Reagan budgets were mild manifestos devoid of revolutionary purpose. They did not seek to 'rebuild the foundation of our society' (the task Reagan set for himself and Congress in a nationally televised speech of February 5, 1981) or even to accomplish the 'sharp reduction in the spending growth trend' called for in [his] Economic Recovery Plan." By Reagan's second term, the idea of seriously diminishing the budget was, to quote [Reagan budget director David] Stockman, "an institutionalized fantasy." Though in speeches Reagan continued to repeat his bold pledge to "get government out of the way of the people," government stayed pretty much where it was.

This hasn't stopped recent contemporary conservative biographers from claiming otherwise. "He said he would cut the budget, and he did," declares Peggy Noonan in When Character Was King. In fact, the budget grew significantly under Reagan. All he managed to do was moderately slow its rate of growth. What's more, the number of workers on the federal payroll rose by 61,000 under Reagan. (By comparison, under Clinton, the number fell by 373,000.) [Washington Monthly, January/February 2003, emphasis added, parentheses original]

During Reagan's Tenure, Federal Spending Rose By 25 Percent. From the Los Angeles Times: "Public debt roughly tripled during Reagan's eight years in office. Federal spending rose 25%, and the federal workforce did not get smaller." [Los Angeles Times, 2/6/11, emphasis original]

Reagan "Added A New Cabinet-Level Department — One Of The Largest Federal Agencies." According to the Washington Monthly, "Rather than abolish the departments of Energy and Education, as he had promised to do if elected president, Reagan added a new cabinet-level department--one of the largest federal agencies--the Department of Veterans Affairs." [Washington Monthly, January/February 2003]

Reagan "Didn't Really Reduce The Size of Government." From CNN: "Thanks in part to the increases in defense spending during his administration, Reagan also didn't really reduce the size of government. Annual spending averaged 22.4% of GDP on his watch, which is above today's 40-year average of 20.7%, and above the 20.8% average under Carter." [CNN, 9/12/10]

  • In 1987, "Defense Spending Hit A Peak of $455.5 Billion." According to the Washington Post: "Reagan came along and brought such programs to life with an infusion of money. Defense spending hit a peak of $456.5 billion in 1987 (in projected 2005 dollars), compared with $325.1 billion in 1980 and $339.6 million in 1981, according to the Center for Strategic and Budgetary Assessments. Most of the increase was for procurement and research and development programs. The procurement budget leapt to $147.3 billion from $71.2 billion in 1980." [Washington Post, 6/9/04]

FACT: Reagan "Nearly Tripled" The Deficit

Under Reagan, "The Deficit Nearly Tripled." According to the New York Times: "[T]he deficit nearly tripled during the Reagan presidency, partly due to tax cuts and increases in military spending." [New York Times, 4/9/08]

  • Reagan Increased The Debt As Share of GDP By Almost 15 Percent: According to the Congressional Budget Office, the national debt as share of GDP increased from 26.2 percent in 1980 to 40.9 percent in 1988. [Congressional Budget Office, 8/5/10]

CLAIM: Reagan Fought For "The Little Guy"

Former Gov. Sarah Palin (R-AK): "But President Reagan said you can't be for big government, big taxes and big bureaucracy and still be for the little guy, and that's who's left out in the cold today." [Los Angeles Times, 2/5/11]

FACT: Under Reagan, The Number Of Americans In Poverty Increased And Income Gaps Widened

During Reagan's Term, "The Income Gap ... Widened" And "The Number of People Living Beneath The Federal Poverty Line Rose." According to The Nation:

Reagan's fans give him credit for restoring the nation's prosperity. But whatever economic growth occurred during the Reagan years mostly benefitted those already well off. The income gap between the rich and everyone else in America widened. Wages for the average worker declined and the nation's homeownership rate fell. During Reagan's two terms in the White House, the minimum wage was frozen at $3.35 an hour, while prices rose, thus eroding the standard of living of millions of low-wage workers. The number of people living beneath the federal poverty line rose from 26.1 million in 1979 to 32.7 million in 1988. Meanwhile, the rich got much richer. By the end of the decade, the richest 1 percent of Americans had 39 percent of the nation's wealth. [The Nation, 2/4/11, emphasis added]

Reagan's Drug Policy "Perpetuates A Racial Caste System." According to a 2006 report from the American Civil Liberties Union:

To mark the 20th anniversary of the Anti-Drug Abuse Act of 1986, the American Civil Liberties Union today issued the report, "Cracks in the System: Twenty Years of the Unjust Federal Crack Cocaine Law." The report details discriminatory effects of the drug law that devastated African American and low-income communities.

"This anniversary marks two decades of a tragic mistake, when lawmakers allowed emotion to overtake reason." said Caroline Fredrickson, Director of the ACLU Washington Legislative Office. "The result is a drug policy that makes a false distinction between powdered and crack cocaine and perpetuates a racial caste system when it comes to our criminal justice system."

One of the report's key findings indicates that sentencing policies, particularly the mandatory minimum for low-level crack offenses, subject people who are low-level participants to the same or harsher sentences as major dealers. As law enforcement focused its efforts on crack offenses, a dramatic shift occurred in the incarceration trends for African Americans, relative to the rest of the nation. This trend effectively transformed federal prisons into institutions increasingly dedicated to incarcerating African Americans.

The report also explains that there is no rational medical reason for the 100-to-1 disparity between crack and powder cocaine, and instead causes an unjustified racial disparity in our penal system. [American Civil Liberties Union, 10/26/06, emphasis added]

 

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